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File Number: 16-378 <br />Impact on Mechanics at Local Auto Dealerships <br />At previous Finance Committee and City Council meetings to discuss the proposed minimum <br />wage, the owner of a local auto dealership expressed concern that the proposed ordinance <br />would impact mechanics who are guaranteed wages of two times the minimum wage rate. <br />Based on subsequent information provided after those meetings, it is now the understanding <br />of City staff that a local San Leandro minimum wage will, in fact, not have any impact in these <br />situations. <br />Anticipated Impact on City Workforce & Budget <br />As of the date of this staff report, there are a number of part-time, non-permanent employees <br />in the City’s Recreation & Human Services Department and Library Department who make <br />less than the proposed minimum wage. Additionally, it is important to note that increasing the <br />wage of these classifications will cause compaction to other classifications, thereby causing <br />an increase in the hourly rate of pay for the Recreation Leader, Recreation Specialist, and <br />Office Assistant classifications. Under current staffing levels, there are approximately 130 <br />employees in these classifications who would be impacted either directly or through <br />compaction (with the majority of the impact resulting from compaction). The precise nature of <br />wage increases resulting from compaction have not been determined at this time, so the <br />projected fiscal impacts are subject to change. <br />Preliminarily, staff estimates the cumulative impact of these changes will result in the following <br />increased costs to the General Fund, broken out by fiscal year. These estimated costs were <br />calculated with a presumption that the new statewide minimum wage requirements will be <br />implemented according to the schedule codified by state law. Therefore, the costs shown <br />below are over-and-above the costs the City will incur as a result of the Statewide minimum <br />wage. <br />Implementation Year: Estimated General Fund Cost: <br />Year 1 (FY 2017-18) $100,000 <br />Year 2 (FY 2018-19) $120,000 <br />Year 3 (FY 2019-20) $120,000 <br />Year 4 (FY 2020-21) $120,000 <br />Fiscal and Budget Impacts: <br />In Fiscal Year 2017-18, staff estimates that salary increases to achieve compliance with the <br />proposed ordinance would result in approximately $100,000 in General Fund costs. For <br />Fiscal Years 2018-19, 2019-20, and 2020-21, staff estimates these General Fund costs would <br />be approximately $120,000 each year. Implementation, monitoring and enforcement of the <br />proposed ordinance could result in additional General Fund costs in the order of <br />approximately $100,000 in the initial year of implementation, which would decline in <br />subsequent years of implementation. Staff will further analyze these costs over the year <br />ahead and report back to Council with additional information at a subsequent meeting. <br />Estimated implementation costs will be considered during the next biennial budget process for <br />2017-18 and 2018-19. <br />ATTACHMENTS <br />Page 3 City of San Leandro Printed on 7/13/2016 <br />391